Efficient Lighting Initiative (South Africa) - A Presentation to the Portfolio Committee on Minerals and Energy

1. Efficient Lighting Initiative (South Africa) A Presentation to the: Portfolio Committee on Minerals and Energy (30 August 2001) Given by: Barry Bredenkamp Bonesa Electricity (Pty) Ltd

2. PRESENTATION OUTLINE • Bonesa – the company; • Background information; • ELI goals; • Benefits; • Practical example; • The way forward; • Conclusions.

3. BONESA – THE COMPANY Bonesa is the local implementing agency established to implement the SA-component of an ELI-programme in 7 developing countries, worldwide. It is funded by Eskom (R48.8 million) and GEF through the IFC (US$2.5 million) and is made up of three local partners, (TSI (EE), Umongi-Karebo and Africon Engineering).

4. Background • 1997 - Global Environment Facility (GEF) granted US$225 000 to Eskom to conduct a feasibility study on the ELI; • Eskom matched the funding; • The ELI recommendations were based primarily on the Eskom ISEP: • peak demand reduction targets • ‘window of opportunity’ ito emerging market - build in efficiency;

5. Background (cont’d) • Eskom support based on ISEP objectives - peak demand reduction (820MW by 2019), & associated environmental benefits; • Estimated net present value saving in avoided utility costs of approximately R990 million over 20 years; • Medium term - funding for similar projects a strong possibility - allow for flexibility and permanence in expanding the role of the implementation structure (LIA).

6. Feasibility Study Completed • Draft ELI Business Plan completed; • Identified barriers to market entry; • Examined consumer behaviour; • Determined strategies for programme implementation: • Organisational: structures required for implementation; • Financial: finance needed to implement; • Economic: viability of the programme.

7. Agreements Reached • GEF committed grant funding of US$2.5 million to the LIA (Bonesa) to implement the ELI; • Eskom Management Board approved three-year funding for ELI,to meet ISEP targets; • Eskom Enterprises (Pty) Ltd agreed to the establishment of the LIA; • Implementation of programme through a BEE JVC - Bonesa.

8. ELI Goals • Increased penetration of energy efficient lighting technologies to meet ISEP target of peak demand reduction; • Improve customer service through reduced electricity bills; • Capacity building and skills transfer; • Conserve the environment through reduced greenhouse gas emissions and reduced consumption of water at power stations; • Support the African Renaissance, through job creation and poverty alleviation.

9. Benefits of ELI:Benefits to Eskom - Major • Meet the ISEP target of 820 MW peak demand reduction by 2019; • Net benefits through avoided capital and operating supply costs (G, T & D); • Affordable electricity for all sectors of society; • Education and capacity building; • Positive contribution to socio-economic factors affecting the country; • Increased access to energy.

10. Benefits of ELI:820 MW

11. Benefits of ELI:Benefits to Eskom -Secondary • Medium term opportunities - aggregate solutions and replicate elsewhere; • Expected reduction in non - payment; • “Take - back” effect; • Lower risk of under-utilised assets; • Improved customer focus.

12. Benefits of ELI:Benefits to Customer • Affordable and increased access to energy; • Contribution to poverty alleviation.

13. Benefits of ELI:Benefits to Environment These benefits are vitally important, in terms of South Africa hosting the World Earth Summit in 2002.

14. Benefits of ELI:Benefits to Munics & Developers • Benefits to Municipalities: • Avoided network capital, operating and maintenance savings; • Avoided bulk purchase cost. • Benefits to Developers: • Avoided infrastructure costs.

15. Benefits of ELI:Benefits to South Africa • South African society to benefit from the sum of the above benefits; • Less capital will be used in building additional networks as CFLs will penetrate the market; • Black economic empowerment and SMME-opportunities will increase; • Socio-economic benefits relating to poverty alleviation, and access to affordable energy.

16. All Africa Games Village – A Practical Example

17. Targets – The Way Forward • Target for 2001: 266 000 additional CFLs in SA market, (500 000 sold ‘Y-T-D’); • Introduction of “Efficient Lighting” into curricula of Schools and Tertiary Institutions; • Contribute towards EBSST – poverty alleviation; • Help identify and retrofit needy institutions, eg. supporting healthcare and the elderly; • Assist in establishing new retail outlets – job creation.

18. Conclusions • The energy sector stands to benefit greatly from ELI - from a strategic ISEP as well as from a profitable business perspective; • South Africa will benefit in terms of the following criteria: • Innovation; • Effectiveness; • Poverty impact; • Sustainability; • Replicability. • Future opportunities could be opened up through this initiative - similar programmes in SA or by replicating the ELI in other developing countries.

19. Conclusions (cont’d) • Positive benefits for ALL! • Win-win situation; • Utility does not loose; • Economy gains; • Innovation encouraged; • Customer benefits.

20. Thank you Discussions and/or Questions?